Is Trump really to blame for reducing NYC tourism?

President Donald Trump and First Lady Melania Trump on the steps of Air Force One.

The number of foreign tourists visiting New York will decline this year for the first time since 2008, predicts NYC & Company, and it is a convenient target to blame—President Donald Trump. It seems too convenient.

Here’s the story. Inquiries about travel to the United States from elsewhere—including key markets such as Europe—dropped sharply in the wake of Trump’s plan to ban immigration from a series of Muslim-majority countries. The forecaster that NYC & Company uses projects that the move will contribute to a decline of 300,000 international tourists (rather than a previously expected gain of 400,000) to a total of just over 12 million. The economic loss will be large because foreign visitors stay longer and spend about four times more money than those from the United States.

Year

Foreign

Total

2011

10.6 million

50.9 million

2012

10.9 million

52.7 million

2013

11.5 million

54.3 million

2014

12.0 million

56.5 million

2015

12.3 million

58.5 million

2016

12.7 million

60.7 million

Source: NYC & Company

The forecaster sees an even sharper decline for the rest of the country.

Last week, after an earlier story about the decline in inquiries about travel to the U.S., I asked my contacts in the industry if they had seen a decline in interest in New York. I was told that it was far too early to tell.

In addition, the strengthening U.S. dollar could be playing a major role since it is making visiting the city much more expensive. For a European, a New York vacation is 5% more expensive than it was the day of the election. Over the last two years, the increase in the dollar against the euro is a whopping 30%. Some people (including me) have been surprised that foreign visitors increased over the previous two years despite the stronger dollar.

The reason for that is the boom in hotel construction, which has brought the total to 112,000 rooms. Those rooms have to be filled and when demand weakens, rates come down. So the overall cost of a New York vacation hasn’t gone up as much as the dollar. Airfares have declined as well.

NYC and Company says it has factored in the rising dollar. It also sees a surge in domestic visitors to push the total figure for this year to 61.7 million, about a million more than in 2016.

The bottom line is that three factors are in play. The president is one of them. The dollar is another. And the possibility of a price war among hotels is the third. Given all that, I am in the same camp as the people I talked to last week: It is just too early to tell what impact Trump will have on tourism.

Crain’s New York Business is the trusted voice of the New York business community—connecting businesses across the five boroughs by providing analysis and opinion on how to navigate New York’s complex business and political landscape.